Savings Credit and Notional Capital

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    I was wondering what other people thought about this scenario:

    Customer sells property in September 2005 during which time he is in receipt of Savings Credit and subject to an AIP. He receives in excess of £60,000.00 from the sale and disposes of approximately 95% of the proceeds within one year.

    The local authority refuses several subsequent applications of the basis that the claimants capital is in excess of £16,000.00 (the vast mojority of which is notional capital).

    In 2009 the claimants old AIP comes to an end and a new AIP is put in place. The customer applies for HB/CTB again and is refused on notional capital grounds (the diminishing notional capital rule has been applied) and the claimant subsequently appeals.

    My question is simply this – do you think the local authority is able to in effect continue with the notional capital decision? Regulation 27( 8 ) says:

    ( 8 ) This paragraph applies if—
    (a) the Secretary of State notifies the relevant authority that the claimant´s capital has been determined as being £16,000 or less;
    (b) subsequent to that determination the claimant´s capital rises to more than £16,000; and
    (c) the increase occurs whilst there is in force an assessed income period within the meaning of sections 6 and 9 of the State Pension Credit Act.

    In effect the above have all been satisfied but it was during his previous AIP however I cannot find any reference saying it must be this AIP. All opinions gratefully received.


    You need to read that paragraph in the context of the rest of the Regulation – it operates as an exception to Reg 27 generally.

    Your starting point is Reg 27(2) & (3) – the Secretary of State provides you with an estimate of income and capital, which he has now done. Para (6) requires to use it unless and until the capital increases to more than £16,000.

    I think it is pretty clear that the new AIF overrides the previous application of para (8).


    Agree with Peter, but you might be able to convince the Pensions Service to reconsider their assessment if you provide details of the capital expenditure. Although given the amount of time that has now passed it will be hard to prove deprivation for PC purposes.


    I would agree that the regulation states that you use the SoS assessment unless the exceptions apply. I was wondering about the phrasing of paragraph 1:

    27. Calculation of claimant´s income and capital in savings credit only cases

    (1) In determining the income and capital of a claimant who has, or whose partner has, an award of state pension credit comprising only the savings credit, the relevant authority shall, subject to the following provisions of this regulation, use the calculation or estimate of the claimant´s or, as the case may be, the claimant´s partner´s income and capital made by the Secretary of State for the purpose of determining that award.

    Would you read the phrase “that award” as identifying it as the current assessment of Pension Credit rather than any previous one – therefore in effect providing a date after which all the conditions of the exception have to be met?


    I think that has to be right, although I doubt that all that much thought went into the drafting … I think all it means by “that award” is something akin to “for Pension Credit purposes”. But the effect has to be that you refer to the Secretary of State’s current determination, as updated from time to time, and it has to be right that paras (7) and (8) are considered afresh in respect of each new AIF determination. As you say, there is a cut-off date.


    If you go back to first principles, an award of pension credit is to be determined by the secretarry of state, and an award of HB/CTB is to be determined by the appropriate authority, that is by the Council.

    A decision on an award is final unless revised or superseded, and a revising or superseding decision replaces the original decision, and the award is consequently replaced

    When an assessed inome period ends, this provides the grounds for a superseding decision b y the secretary of state, which of course replaces the earlier decision and with it the earlier award.

    “That award” in the context of this discussion therefore means the current award of pension credit

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